Adobe expects to generate revenues of $5.50 billion to $5.55 billion in the fourth quarter of the fiscal year. This is below LSEG's forecasts - analysts estimate that the Photoshop manufacturer's revenue will reach $5.61 billion, Reuters reports.
The company also expects its quarterly adjusted earnings to be in the range of $4.63 to $4.68 per share, compared to the forecast of $4.67 per share.
According to Reuters, the weak financial outlook reflects fierce competition and low demand for Adobe's AI editing tools amid difficult economic conditions.
Founded in 1982, Adobe is facing competition from startups such as Stability AI and Midjourney, which allow generating images based on textual prompts.
Adobe's revenue for the quarter ended August 30, 2024 was $5.41 billion, exceeding LSEG's forecast of $5.37 billion. At the same time, operating expenses increased to $2.86 billion compared to $2.61 billion a year earlier.